DESPERATELY NEED ADVICE! I have a complicated situation...

superclio

I really, really need advice. My situation is quite complicated so bear with me, it’s a long one: it has dawned on me (a little late in the day) that I cannot keep up with my monthly repayments adequately for all my credit cards and loans. I owe £21,000 in total, £9,000 is on an Egg loan which I am happy with – they are very supportive in terms of taking holiday breaks, paying it off early, and it’s very easy to manage online, and unlike the credit cards I can actually see it diminishing over the years (it was £12,000). The rest is scattered on credit cards. I try to shuffle them around as best I can always getting the best % rate wherever possible, but those options are dwindling. My credit rating has plummeted – more of that later – and with everyone asking for a handling fee these days it negates the low interest rate, plus I have the most hectic job when I am working and before I know it a week has become a month and the deadline for the low interest rate has expired and I’m back on 13% again.
I changed careers a year and a half ago and am now freelance. When I work I am paid pretty well, but there is no guarantee of where/when I’m getting my next job, and being so new to the industry I’m still forging contacts and networking and can only go on the last 12 months as a vague rule of thumb – for which I worked for about 81/2 months, and was unemployed for the rest. So I’ve averaged out my yearly wage as worst case scenario: 6 months working and 6 months on unemployment and taken the result as my net pa. Here’s the complicated part: I’ve moved to the States. I’ve managed to keep my address in London and have all my mail forwarded so I haven’t told any of my debtors - that would jeopardise any chance of low interest rates, special deals, or consolidating my debts. Each month I’ve been sending back money to my account and it was all fine, I was paying to send the money and yes that hurts, and I was only just keeping afloat it’s true, but I was managing – just. My debit card expired last July and I had a fight with Abbey National to get a new one sent to me in America, or have someone pick it up in London – but finally I have the new card and am waiting for the PIN now, but without a valid debit card I couldn’t log on to my account online. Since this was the account from which all my payments were coming and going it had made things extremely difficult, case in point: I was on the road for work most of March and all of April, when things had slowed down a bit (I work 12-14 hour days) I made some calls to see how my account was and to my horror found out that the money I had sent for March’s payments had never arrived. It left my account and somewhere in between got lost. The result was all my debits had been bouncing – twice each and I had over £600 in various bank charges and my credit was severely compromised. The bank in the US put a trace on the money and I was finally promised it back by yesterday at the latest (it hasn’t appeared in my account yet though). I called all the banks in England explaining the situation, all of them said ‘sorry we can’t stop the next direct debit – it’s too late’ and Abbey National said the same thing – it’s too late to prevent the ones coming out in the next 48 hours, and also refused to extend my overdraft temporarily from £550 to £750 in order to cover the debits. As a result I wrote a letter to Abbey National explaining all of this and they have credited me £188 worth of charges which is most of them, but I am still trying to negotiate with all the creditors to refund some of their charges. But the bottom line is earning US$ for a debt that is in £ is just killing me. To compound things even further for some random reason the post office stopped forwarding my mail for a few weeks – they can’t tell me why and have apologised profusely, but in the meantime it meant a lot of my statements got returned saying ‘no longer at this address’ so they put my accounts on hold. I called and explained I was out of the country for a while but had kept that address and didn’t know how that had happened (if I turn around now and say yes actually I’m living in another country I don’t have a hope in hell of getting any help from them in terms of freezing the interest rate or whatever else it is that CCCS etc recommend I try). So extremely bad luck between $1000 going missing and then the post office’s lapse in sending my mail, but it pointed out to me that I’m in way over my head.

I could just say sod it all, I don’t even live there and just default on every one of them – but I just cannot accept that. I took this money and I have to pay it back, however I can. I wake up every morning with this enormous weight on me, with the realisation that instead of being the homeowner all my friends are and with my finances and career in order, at 34 I’m in over my head and can’t see how to get out of it. I have no family I can count on and a soon to be ex husband who has agreed to pay a meagre £50 a month into my account (since I supported him for 2 years and he was a small contributor to my debts).

I was back in England recently and out of sheer despair I called the National Debtline and CCCS for advice. I contemplated an IVA although this scared the hell out of me, but the problem is you need to have employment/unemployment details and of course all mine are in America, so that’s not a viable option for me. The CCCS to my surprise were staggeringly unhelpful (the lady told me I just have to tell the credit cards I can pay what I can afford, and it will have no impact on the interest rate. When I pointed out that in that case it will take me over 50 years to pay off my credit cards, or not even – I’d be earning more interest on them than I was paying per month and therefore NEVER be out of debt she responded ‘yes, but you’ll be able to eat’. True. But it doesn’t stop me from waking up in the night in a cold sweat thinking my life is in ruins and I’ll never be out of debt again.) A friend of mine used Spectrum, he paid them £400 and as a result they contacted all his creditors and he now pays just £20 a week, and in 5 years it’s all over and it’s no longer on his credit rating anymore. I’m suspicious of this though: surely that’s like telling an alcoholic you’ll only help them if they take another drink?! Paying £400 is almost an entire monthly payment for me, so I feel they’re not entirely trustworthy. Also I don’t like the idea of having this on my data, I don’t trust that it’s as simple as that, oh yeah after 5 years it’s just like normal again. If (if, IF!) I had the money to come back and buy somewhere are you really telling me in 5 years this wouldn’t affect my chances of getting a decent mortgage? That I really won’t be tarred by this? I feel like I’ll be walking around with a red D for defaulter sewn onto my clothes.

So I’m not sure what to do. I do know that if I open a Citibank account in the US and send money from that to another Citibank account in the UK the charge is just $20 as opposed to the $50 I’m paying at the moment, which would ease things considerably. For example right now I have about $300 I could send over but it’s not worth it, I need to wait another couple of weeks till I have some more, but on the other hand if debits are going to bounce it’s costing me too much that way also, so I just have to commit myself to spending $50 every two weeks and send the little bits of money as I have it (ouch, that hurts). Egg told me they would consider consolidating what was on my credit card with them onto the loan, but since my low rate has expired with them I’m about to transfer it asap once I find a card that won’t charge me a handling fee. So once it’s off their card I don’t know that they’ll offer the consolidation to me. On the plus side I am 98% likely to be doing a job in London for 5 weeks starting in June (£250 a week, take home), which means I’ll be able to sort out my finances easier, have £ coming directly in to my account, and hopefully have some sort of paperwork to show for it if need be.
I did Martin’s Budget, converting my living expenses, etc in to £ from $ using the atrocious 1.9 that it is these days (another way I’m painfully losing money) and the results are as follows, but remember I’ve averaged everything out over 12 months, so yes the bottom line is that over the year my outgoings are bigger than my incomings, but it doesn’t seem that way from month to month, when I work I earn a minimum of £368 per week ($700), when I’m not working my unemployment is £174 per week ($331). So some months I’ll be on £1472, others it’ll be £696.

Here it goes:
Incoming: £1176
Outgoing total: £1732
Debts broken down:
Egg Loan: £220
Credit cards: £350
Everything else: £1162

Credit cards are currently:
Egg: £5078 special rate expired in April
Alliance and Leicester: £3129 special rate expired in April
Abbey National: new card, 0% till Oct, £950 just transferred from Egg and Barclaycard (limit on this card is £1000)
Barclaycard: £3,629.13 total, £3425.67 was on a special rate, not after May. The rest is on the 0% for the life of the balance, but now I’m not sure how I transfer the high interest balance without losing the 0% balance offer. Think I might have got screwed by that one. 
Marbles: £781 low rate runs out end of May.
I also have MoreThan and Providian, neither of which I’ve used in years since their rates haven’t been that great.

I know I know – I need to cut back on everything which on the whole I can and will do, I also figured out I spent over £1000 on various bank charges over the last twelve months so I’m clearly not handling my expenses anything like as well as I think. So, time to take my head from the sand and smell the coffee.

What, oh what can I do?

PS I’m not entirely sure how this forum works: am I supposed to sit here and wait for the replies? Because I can’t! I have to go out now so I’ll check back in over the weekend to see what all you lovely smart money saving experts recommend. And THANK YOU THANK YOU THANK YOU for whatever help you can offer.

Smiley_Mum

This link has some info on it that may be of some use.

http://travel.telegraph.co.uk/travel/main.jhtml?xml=/travel/2005/05/21/etcase21.xml

Malestrom

Can you apply for credit in the USA? I wouldn't normally advocate consolidation but if you were able to get a loan in the USA and use it to pay off your UK debts then you would be in a far better position. You current lifestyle is a precarious one, as you have recently realised. If you can save $30 per money transfer then change banks!! Also, have you asked the US bank that 'lost' your money to cover the charges incurred?

Murtle

why don't you come back to the UK and work here?? can your work only be carried out in the States?

You are currently over spending by £600 per month. I am hoping that this is including living expenses within the 'everything' else? What is the everything else?? can it be reduced...it needs to be reduced....

As far as I'm aware you don't need an active debit card to be able to access your online account, just your normal login and password....(if this was already set up??!) you could speak to the bank that 'lost' your money in transaction about paying towards the outstanding fees.

A consolidation loan in $ might be better to spending all the transfer fees and the loss in the exchange rate, meaning that you'd be able to pay it off quicker

(the lady told me I just have to tell the credit cards I can pay what I can afford, and it will have no impact on the interest rate. When I pointed out that in that case it will take me over 50 years to pay off my credit cards, or not even – I’d be earning more interest on them than I was paying per month and therefore NEVER be out of debt she responded ‘yes, but you’ll be able to eat’. True. But it doesn’t stop me from waking up in the night in a cold sweat thinking my life is in ruins and I’ll never be out of debt again.)

This isn't strictly true, as you can write to the companies explaining your situation and request for the interest rates to be frozen. CAB etc can also do this, but I think that by you working abroad it won't behelping your situation if you can find similar employment over here as they won't like the expensive transfer payments etc....the credit card companies would rather have that money

superclio

Thank you all for your suggestions. In summary: 'everything else' is EVERYTHING. rent, pet food, shampoo, phone bill, food, petrol, etc, literally every single thing (I enter it all on Microsoft Money so that's how I know). And yes I can cut it down by a bit, and will do that: no more meals out, no more clothes, nothing that is not absolutely necessary, so I can bring it down by maybe £150? Seems like quite a lot of money when I think about it that way!

I don't see that it is benificial to transfer the debts to the US though: firstly as I 've only been here for 1 1/2 years I couldn't raise that much credit here, also with the exchange rate being so weak I feel that I would effectively be increasing my debt. The problem isn't so much that my debt is in another country, more that I'm struggling with paying it off each month, and most of the usual options don't seem open to me because of the paperwork/administrative issues of not working in the UK. It's not realistic for me to come back either - the work is so, so much harder to find in the UK and I am making real career progress here which just couldn't happen to the same degree in London. Plus London life was really getting me down, I am much happier here, by far.

I will look into HSBC, that's a really good point.

Maybe I should make an appointment with CAB then when I come back? You think it is possible that I could get the interest rates frozen? That would be amazing, then I might actually have the option of paying it off instead of robbing Peter to pay Paul.

Would an IVA - if I could actually get it, be a good idea? Or am I tarnishing my rating, and if I could do it, are there way of doing it for free or do you have to pay a company like Spectrum to arrange it all for you?

idiot_3

i would not advocate using a fca (fee charging agent.) their monthly fee could be better spent on paying your creditors.

use either payplan (the management company the banks/cred cards fund), cccs or cab.

i can understand to a degree their reluctance to deal with you, as you are out of the country for most of the time. i am not sure of what the regulations are as to transferring international debt: i do know that if it were to go to debt collectors they can pursue you if you are abroad, or sell it to a native collection comapny where you are.

although you do not seem to be, burying your head in the sand certainly is not the answer. this will not go away. i think perhaps the best idea is to write to the companies involved witha detailed budget and a realistic amount you can offer to pay. the ball is then in their court as to what they will accept.

if you do not have one already, i am sure debt like this could affect you gaining a permanant residency visa in the usa.

davidcampbell

As far as I'm aware you don't need an active debit card to be able to access your online account, just your normal login and password....(if this was already set up??!) you could speak to the bank that 'lost' your money in transaction about paying towards the outstanding fees.

you do for abbey accounts

I called all the banks in England explaining the situation, all of them said ‘sorry we can’t stop the next direct debit – it’s too late’ and Abbey National said the same thing – it’s too late to prevent the ones coming out in the next 48 hours,

you should be able to cancel a direct debit with the bank immediately (at least within business hours). would be too late to stop it from the originators end but ok at the bank end. assuming originator doesnt charge you for cancelling it you should be ok?




DC

superclio

That's interesting about the debit cancellation, the person at Abbey I spoke to seemed to be convinced that I couldn't prevent the debit. And presumeably even if I could stop my bank for giving it, I would still be charged late fees, etc from the credit card?

I have dual citizenship so fortunately I don't need to worry about residency here. The only thing about paying someone to deal with this is that I'm thinking they might be more open to helping me as opposed to gettig caught up in the implications of my not being permanently based in the UK anymore. I think CAB and people might just tell me the ball is in my court to contact the creditors and negotiate with them.

Does anyone know if some companies are 'nicer' than others? For example if Egg has a more understanding take on things than Barclaycard then it's better for me to move all my debt onto that card and then talk to them than to try to negotiate with Barclaycard.

davidcampbell

That's interesting about the debit cancellation, the person at Abbey I spoke to seemed to be convinced that I couldn't prevent the debit. And presumeably even if I could stop my bank for giving it, I would still be charged late fees, etc from the credit card?

well yeah but any others that didnt run that risk would be ok to cancel

DC